What does loan servicing typically include?

Collecting information from the buyer

Deciding the level of risk for a loan

Providing the cash in the amount of the approved loan

What should a buyer do when purchasing a home subject to the existing mortgage?

Pay off the seller's old mortgage

What is the primary market in mortgage lending?

B. Where mortgages are first created by connecting lenders to borrowers

A. Where mortgages are bought and sold

C. Where loans and servicing rights are sold to investors

D. Where real estate properties are auctioned

What is the purpose of the secondary market in mortgage lending?

B. To package and offer up mortgages to investors

C. To provide loans directly to borrowers

What happens to the borrower's ownership of the property in hypothecation?

B. The borrower maintains ownership

A. The lender takes full ownership

C. The property is sold to a third party

D. The ownership is transferred to the government

What is leverage in the context of mortgages?

B. The use of a relatively small amount of money to get a much bigger loan

A. The use of a large amount of money for purchasing real estate

C. The process of selling mortgages to investors

D. The method of repaying a loan in small installments

Match the following responsibilities with their descriptions:

Collects the homeowner's payments every month

Determines the value of the property

What does the escrow account contain?

Money for the home insurance and property taxes

Money for the homeowner's monthly payments

Money for the property's valuation

Why might a lender require a homeowner to maintain home insurance?

To ensure the property is protected against damage

To increase the property's value

To reduce the homeowner's monthly payments

To facilitate the sale of the property

What does the sales comparison approach determine?

The value of a property by comparing it to similar properties that have been sold recently

The cost of replacing the property

The potential income from the property

The depreciation value of the property

What is the purpose of making comp adjustments?

To assign a dollar value to certain features and qualities of properties

To determine the cost of replacing the property

To estimate the potential income from the property

To calculate the depreciation value of the property

What does the income approach determine?

The value of a property by paying attention to the amount of income it could produce for its owner

The cost of replacing the property

The value of the property by comparing it to similar properties

The depreciation value of the property

What is the main difference between conforming and non-conforming conventional loans?

Conforming loans follow guidelines to be sold on the secondary market.

Conforming loans are insured by the government.

Non-conforming loans are eligible to be sold on the secondary market.

Non-conforming loans have lower interest rates.

What is a key characteristic of interest-only loans?

The borrower pays only the interest for a set period.

The borrower pays down the principal amount monthly.

The borrower pays both interest and principal from the start.

The borrower does not pay any interest.

What is the first step in finding the cost of an interest-only loan?

Find the total annual interest.

Divide the total annual interest by 12.

Subtract the interest rate from the loan amount.

In an assumption transaction, what does the buyer assume?

The existing mortgage on the property

The property's insurance policy

What happens when a loan is in default?

The borrower has failed to make one or more payments.

The borrower has made all payments on time.

The mortgage servicer ignores the property.

The borrower receives a reward.

What is the primary responsibility of the mortgage servicer when a loan is in default?

To sell the property immediately.

What does the SAFE Act stand for?

Secure and Fair Enforcement for Mortgage Licensing Act

Real Estate Finance Study Guide Questions - AI

Authored by Elizabeth Coughlin

Business

12th Grade

Used 2+ times

Real Estate Finance Study Guide Questions - AI

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the first step in determining "how much house" the buyer can afford?

Pre-approval

Final approval

Pre-qualification

Mortgage application

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is required for a mortgage application?

Only a credit report

Only financial documentation

A mortgage application, credit report, and supporting financial documentation

Only a mortgage application

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happens during the final approval step in the loan approval process?

The lender evaluates the borrower's financial situation

The lender evaluates the exact loan for a specific property

The lender charges fees

The lender evaluates the borrower's credit report

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Who is responsible for bringing together a borrower and a lender to create a mortgage?

Mortgage banker

Real estate agent

Mortgage broker

Financial advisor

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the role of a mortgage banker?

To evaluate the borrower's credit report

To provide mortgage financing using their own funds

To bring together a borrower and a lender

To charge fees for loan processing

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary difference between a correspondent lender and a mortgage banker?

Correspondent lenders use their own money at their own risk.

Mortgage bankers use their own money at their own risk.

Correspondent lenders work on a larger scale than mortgage brokers.

Mortgage bankers work on a smaller scale than mortgage brokers.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the first step in the creation of a new mortgage?

Loan processing

Underwriting

Origination

Closing

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Real Estate Finance Study Guide Questions - AI

What is the first step in determining "how much house" the buyer can afford?

What is required for a mortgage application?

What happens during the final approval step in the loan approval process?

Who is responsible for bringing together a borrower and a lender to create a mortgage?

What is the role of a mortgage banker?

What is the primary difference between a correspondent lender and a mortgage banker?

What is the first step in the creation of a new mortgage?

Which of the following is NOT a factor that lenders consider when processing a loan?

What is the process of deciding the level of risk a lender would take by giving a loan to a certain borrower for a specific property called?

What does loan servicing typically include?

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